Dow Jumps 150 Points, S&P 500 Rises as Ukraine Quiet, Data Solid

By Ben Levisohn

The Ukraine is still a mess but stocks are gaining anyway after a referendum that will see the Crimea become part of Russia. 3M (MMM), Goldman Sachs (GS), International Business Machines (IBM), Biogen Idec (BIIB) and Yahoo! (YHOO) rise.

REUTERS

The S&P 500 has risen 0.8% to 1,856.06 at 10:58 a.m., while the Dow Jones Industrial Averages has advanced 147.86 points, or 0.9%, to 16,214.88. Biogen Idec has jumped 4.1% to $3465.95 after it was added to the S&P 100 mega-cap index, while Yahoo! has climbed 3% to $38.74 on reports that Alibaba would start the IPO process. 3M has gained 1.6% to $131.92, while Goldman Sachs has risen 1.4% to $167.66 and International Business Machines has advanced 1.7% to $185.19.

Investors are feeling more optimistic this morning following the referendum in the Crimea, in which voters approved a referendum to join Russia. No mass Russian invasion is always a good thing. Still, the region is likely to remain a powder keg. Citigroup’s Tina Fordham and Matthew Dabrowski explain what could go wrong:

Given the likelihood of outcry from world leaders, Russia could opt to delay absorbing Crimea in the event of a yes vote. If its troops also returned to barracks in Crimea (where they are legally allowed to be) and/or if Russian troops massed along Ukraine’s eastern and southern borders withdrew, tensions would likely de-escalate, and the impact on markets would be modest. Recognizing Ukraine’s interim government has been another demand from the West. On the other hand, if Russia moved quickly to annex Crimea, volatility would likely increase, while if Russian troops were to extend their presence further into eastern and southern Ukraine — a development that could be prompted by ethnic clashes, for example — the geopolitical risk temperature would increase dramatically. Russia’s parliament has authorized the use of force “on Ukraine’s territory until the socio-political situation is normalized,” and earlier this week warned that Russian forces could be forced to intervene if Ukrainian security services failed to maintain public order.

Helping to buoy stocks today: U.S. economic data. Industrial Production rose 0.6% in February, well above the 0.2% increase forecast by economists. The Empire State Manufacturing Index rose to 5.6 in March from 4.5 in February, below forecasts for 6.5, but still a rise. Jefferies’ Thomas Simons explains why the reading should be considered good news:

The most important aspect of the analysis of this month’s data is the direction of the move in the headline index, not the magnitude. Following a period of weak activity that was likely dampened by weather, it is encouraging to see the index improve this month. The sub-indexes show mixed changes from last month, but in general we are seeing the signs of stabilization that suggest that the weakness in October through February was the product of logistical and confidence issues spurred on the government shutdown and then the rough winter, as opposed to a breakdown in fundamentals. Additionally, the 6-month outlook indexes were all quite strong, suggesting that manufacturers in the region are viewing the recent slowdown as a temporary phenomenon and remain optimistic about growth prospects in the second half of the year.

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Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.